Tuesday, May 29, 2007

How Rich Media Display Ads Driving Serious Results - Espically Off Line

Just two small tidbits about the increasing impactful role that rich media ads are playing...

1. Phil Cara, director of Yahoo Consumer Direct, was recently quoted for saying:
"We (Yahoo!) get insights and then advise on best practices. For example, when rich media became popular, we did a side-by-side comparison of all the results and saw that there was a better than 50% higher result from those campaigns that included rich media. So we were able to improve our product by including rich media at no additional cost in more campaigns."
2. New research from eMarketer that suggests that rich media display ads will grow from about $1 billion per year to over $7 billion by the year 2011


New Way Of Closing The Multi Channel Shopping Loop

Looks like AC Nielsen and Yahoo! have really done the impossible. They can now measure the impact of online research on offline sales. Simply amazing. The process and methodology seems really solid as do the results. This brings new meaning and definition to the words "ad targeting" and offline accountability and measurement.

Bringing BT Home Once Again

AS WE COVERED LAST WEEK with AC Nielsen's Steve Warshaw, Yahoo and the research company's four-year partnership on the Consumer Direct product combines online ad serving and user tracking with offline scanning of actual retail habits. The result is a remarkable view into the ways online advertising directly affects buying patterns. This week, Phil Cara, director of Yahoo Consumer Direct, explains how the product has evolved from an accountability measure to a targeting tool.

Behavioral Insider: How has Consumer Direct evolved over the last four years? What are some of the key learnings here?

Phil Cara: It was really a measurement tool when we created it. CPG sales happen in stores. So when we started, the whole concept was, how can we provide better understanding to our customers of how online marketing can impact offline sales.

Four years later, the whole model has flipped. Accountability is just a feature in the product, but the product is really the targeting -- and that is what our customers have embraced. They see the targeting as a way to gain efficiency in their marketing plans. The real promise of digital marketing is not just to do it the way we do it offline, but to do it better. And the product is much better today than just two years ago. We now have over 90 results. In the first 40 results we saw an average offline sales difference [as a result of exposure to online campaigns] of 19%. Today that number is 29%.

Behavioral Insider: What explains the increase in results?

Cara: Some of it is improvements in predictive models. The other, I think, is just the experience of the advertising community. The creative is much better than it was a couple of years ago. And then things like broadband adoption and even the technology continues to improve our ad serving. Our frequency capping is better. Our BT is better.

Behavioral Insider: Walk me through how the process works on Yahoo's end.

Cara: There are three parts to this product; first is targeting and segmentation. Nielsen creates a predictive model, they give it to us and we run it on our BT engine, which enables us to identify the consumers that fit the model. We create predictive models.

And then we score our database of 130 million Yahoo users and we create an audience. So typically we will score 10% of the network. We now create an audience of about 13 million Yahoo users in probably eight to ten million households. We serve an ad campaign typically of about 60 million to 100 million impressions to that audience. As the campaign is running we will naturally hit some of those 46,000 Homescan panelists, and we are able to track which of those panelists have been exposed to the advertising and which have not.

At the end of the campaign, we send that exposure file back to Nielsen, which now knows that, say, 4,000 of this 46,000 were exposed to this campaign. Nielsen will create a control of 4,000 that were not exposed that have basically the exact same purchasing and demographic profile of those that were exposed. And then from that Nielsen does a very detailed sales impact analysis.

The key things we are looking at are, what was the sales difference? How did it come about? What is the projection of actual offline sales attributed to this campaign? How much in dollars did I drive to the store? Then the customer has the ability to do some ROI calculations.

Behavioral Insider: Can Yahoo also take these findings and use them to improve targeting and creative?

Cara: We get insights and then advise on best practices. For example, when rich media became popular, we did a side-by-side comparison of all the results and saw that there was a better than 50% higher result from those campaigns that included rich media. So we were able to improve our product by including rich media at no additional cost in more campaigns.

Behavioral Insider: How does the Homescan data help deepen your profile of Yahoo users?

Cara: It is the core of helping us create good predictive models. There is a difference between someone who is a heavy category purchaser and a light purchaser, and that has a lot of value in the model. If you think about the way most advertising is conducted, you might go after, say, women 25 to 54. The reality is that not all women 25 to 54 are even buying a category. And then there are those who are buying a category heavily, so 20% may be driving 80% of the volume. So we are using this insight [from Homescan] to find that 20%. And that is what adds lift to the campaign and proves efficiency.

Behavioral Insider: Is that what you mean when you say that the model has flipped from accountability to targeting?

Cara: Yes. Most of the CPG companies and other industries understand that if they can find people in the category, that it is going to add efficiency to their marketing. The problem is most media can't do that.

Behavioral Insider: Finally, walk us me through a case where all of this comes together, where you use Homescan data to hone targeting on your network and then prove its effect back at retail.

Cara: We had a food manufacturer that had a specific initiative to increase buying rates in Wal-Mart Super Centers. So we got into Homescan and identified consumers who buy that category, in this case cereal, and who also shop at Wal-Mart Super Centers. And from that we created a predictive model. We scored our network, created an audience. Ran the campaign, which included a promotional offering, and at the end of the campaign measured the purchasing across all outlets and also Wal-Mart. While the campaign did well across all outlets, it did substantially better, over 50% sales lift, in Wal-Mart Super Centers.

Thursday, May 24, 2007

Retailer Shopping Channels Continue To Converge

In a recent Forrester study (The Inevitable Convergence Of Retail Channels -- How POS, Commerce Platforms, And Contact Center Applications Unite - 5/17/07) that talks about how more and more consumers are now demanding consistent information from retailers as they cross channel shop. The type of information that these consumers are looking for integrated access are loyalty programs and promotions to inventory visibility and availability. Retailers are going to have to build bridges across these channels so as to offer these multi channel shoppers universal, up to date access to all required data points.

Here are a few stand out findings from the study, but make sure to take a look at the chart at the bottom. It gives a little more insight into whom exactly is multi channel shopping these days (as far as life stage clusters):

  • Need for more consistent experience
    • Single unified loyalty program
    • Consistent promotions across channels
    • Inventory and fulfillment tracking
    • Returns regardless of purchase channel
  • Consumer Facing Features
    • Loyalty programs – might allow for identification of users
    • Mobile technology – allows for immediate pricing information
    • Inventory management – online and in-store inventory will available in one place
  • Over half of online consumers research online but purchase in store
    • Expectation of one single experience across channels

How Simular Do Online Shoppers & Off Line Shoppers Behave?

Very recently (5/21/07), some new research came out from Performics DoubleClick (via the e-tailing group) that talks about the loyalty of online shoppers. Below are the two most interesting sound bites, but here is my question? Would the same results apply to those that shop off line? I would guess not, as price comparison shopping is much more costly and difficult to do in the physical world than it is in the virtual world. This has to be good news for retailers, unless some of the mobile comparison shopping services take off.
  • Seventy-one percent of shoppers “browse multiple online stores prior to completing a purchase."
  • Four out of ten (42 percent) shoppers “price shop a product via comparison engines."
For more on the results on this survey that Performics DoubleClick ran, click here

Friday, May 18, 2007

A New Way To Think About Tracking Multi Channel Shopping

So I just read the below article on some a new framework on how to track those shoppers that cross shopping channels. Interesting read which I encourage you all to read. My big take away is the best wat to track this behavior is through offering tools that encourage and make this type of shopping easier and more possible. As a result, if you build and release a useful tool full of utility, people will use it and you will be able to capture loads of data points as a subsequent result.
How to Embrace Multichannel Behavior
By Jack Aaronson - May 18, 2007
We've looked previously at ways to understand multichannel user behavior and about Web-to-store and store-to-Web analysis. Today, we'll step back and look more generally at the methodology needed to really understand multichannel behavior. I call it "embrace it, then trace it."

To understand the philosophy, I'll use a folklore tale of an architect. (I believe the story is true; if you know the source, please tell me.) According to the story, an architect was hired to design a college campus. He put up the buildings but created no sidewalks. When the head of the school asked him where the sidewalks were, he replied, "The students will create the sidewalks." Sure enough, a year later the architect visited the school and built paved sidewalks where the students had created well-worn paths in the grass.

I love the images and inspiration this story conjures. It's truly customer-centric (needs-based) design. We can learn from this story as we create a methodology for modeling multichannel behavior. You're most likely aware of how your users act within a channel. You know how to create the best brick-and-mortar experience, catalog, Web site, kiosk, call center, sales office, Web 2.0 widget, and the like. In the story of the architect, these channels are the buildings. They run fairly well on their own. But how do users move between them? What paths do they create? And, most important, how can we analyze the paths' success and value?

Here are the three steps to the "embrace it, then trace it" methodology:

Embrace It

Embracing multichannel behavior is like paving the sidewalks between the buildings. First, you must spend time watching user behavior. Then you can understand what pathways the users are creating. Some pathways we've seen created in the last few years include:

* People researching online, then buying in the stores
* People going to a store to feel and touch, then finding the cheapest price online
* People browsing a catalog, then calling the call center or ordering online
* People browsing online, then calling to buy
* People banking online and at the ATM
* Businesses interacting with a supplier's sales rep in person and via client extranets

While we have seen these behaviors before, your users might be creating paths unique to your industry or unique to their needs.

The problem is most companies don't know how to track this behavior. That's because there are no pathways that make this behavior traceable. Once you understand what these paths are (or at least some of them), it's time to pave the sidewalks. Create functionality that not only enables the behavior but also makes it easy for the user to take these paths.

I've given store/Web examples in previously. In a nutshell, here are some ways people create pathways between channels:

* Create "catalog quick order" features on your site to enable catalog users to easily buy online while holding their catalogs.
* Create printable shopping carts and integrate "pick up in store" functionality that allows people to buy online and pick up in store.
* Let sales people create accounts for in-store customers that contain wish lists of the products they viewed in the store, allowing them to purchase them online.
* Print vanity URLs in your catalogs that enable quick links online that show the merchandise in that section of the catalog.
* Let salespeople have their own extranets for each of their business clients.

All of these ideas create paths and encourage the behavior by making it simpler.

Trace It

You can't track behavior and understand its value until you enable it. Once the sidewalks are paved, it's time to track who's using which ones. Analytic packages like Coremetrics and Omniture are making great strides in multichannel analytics. With integrated point of sale systems, online and Web 2.0 metrics, and the like, work with vendors to install tracking systems on each pathway. Once the analytics are in place, you can understand the value of not only each path but channel permutations. In other words, what type of multichannel user is more profitable? Those who use channels X and Y, or those who use channels Y and Z? What about those who use X, Y, and Z together?

Credit It

The last piece of the puzzle has to do with credit. Who gets credit for a sale that starts on the Web and finishes in the store? Does the catalog get credit for a purchase that began there? Business rules must be put in place to assign value to the paths. Not only does the value have a path, it's split between the path's endpoints. Perhaps a path from the catalog to the store is credited X percent to the catalog and Y percent to the store for the first purchase. Subsequent online purchases by the same customer might be attributed differently. The catalog was responsible for the beginning of the relationship and should be credited to some degree for subsequent purchases, up to a certain amount.

Each business is different, so this is the most vague and mystical part of the process. An accounting structure must be put in place that all channels agree upon. That will encourage multichannel users, which is what we want. By splitting the credit for each path and letting each channel retain some percentage after the first sale, the fear of channibalism is lessoned.


People fear what they can't control or understand. A lot of the concern around the multichannel user experience is simply that companies haven't figured out how to capture the data. Once the data is captured, it's a matter of creating business rules to understand credit and value.

The first step is understanding the paths people are taking between your buildings and why. Once you create the sidewalks that let them do this easily, everything else will follow suit. The technology exists to track these sidewalks, attribute value to them, and credit the channels appropriately.

Tuesday, May 15, 2007

The Buying Decision Making Process Is Not A Funnel Any More

Here is a little challenge to my (and probably your) thinking. We’ve always imagined the purchase process as a funnel – but it’s not. New technology allows consumers to gather information at all stages of the purchase process. Half of all consumers are still gathering information from a variety of sources right up to their point of purchase. Wow, that really does shake up my mental thought process of how I think about leading a user towards conversion.

Purchase Intent Of A User Goes Up If They Searched Before Shopping

Here is some interesting research from Yahoo! Search Marketing that talks about how searchers make up their minds online & are less likely to change them when actually going offline to make a purchase. It indicates that these users that are searching online and ahead of time and are building their expertise prior to purchase, that this group is less likely to change their mind about the product they wanted while shopping offline.

Retail Fluency Report, Summer 2005
CMO Council, in partnership with ConsumerEdge Research Group
Target: Offline Purchasers of Consumer Electronics (Digital Camera, Computer/Laptop, DVR/DVD player, Printer, TV purchasers)
Significant difference at a 95% confidence level

Online Search Influences Over 50% Of Online Sales. Does This Hold Up For Off Line Sales?

So here is the big question...What percent of online searches influence off line sales? All of the below research talks about online search's direct influence over eCommerce sales. I wonder if this research holds true for influencing off line sales? I would imagine that the influence of search is actually greater. Yes? No? Leave a comment and tell me what you think?

Search Before the Purchase Understanding Buyer Search Activity as it Builds to Online Purchase
Feb 2005

To better understand how consumers use search engines in the online purchase process,
DoubleClick commissioned comScore Networks to use its panel of 1.5 million U.S. Internet consumers to provide further insights. comScore ide
ntified people who made purchases on one of 30 sites in four categories: Apparel, Computer Hardware, Sports/Fitness and Travel. comScore then captured all relevant search activity of those buyers within the four specific categories during the 12 weeks prior to purchase, separating their search terms related to their ultimate purchase topic from other types of searches they may have conducted.

Most Buyers Complete Their Relevant Search Activity Well in Advance of Purchase

Most searchers observed in the comScore panel completed their search activity well in advance of purchase, as shown in the below graph. This is a strikin
g observation, as many marketers consider that a click from a search engine that does not convert into a sale in the same session is worthless, while the research indicates that buyers do considerable advance planning and research before completing their transactions.

Looking at searchers, the story is even clearer: the majority of buyers never searched for a retailer brand at all in the 12 weeks
preceding their purchase. In the Computer Hardware vertical, 92% of all searchers used some kind of generic search but only 27% performed a brand-only search, as shown in Figure 3 (note that the numbers add up to more than 100% because some searchers may have employed more than one search style).

Summary Level Findings From This Study
  • Search plays a role in roughly half of all online purchases.
  • The majority of pre-purchase search activity (searches and clicks) involves generic terms, not the merchants’ brands.
  • Branded terms peak in search activity closer to the purchase.
  • Most buyers complete their relevant search activity well in advance of the purchase.
  • Generic terms represent an opportunity to attract and engage in-market searchers throughout the buying cycle.
  • Search result analyses (sales and ROI) that consider only a short period prior to purchase do not account for the value of generic search activity earlier in the buying cycle.

Monday, May 14, 2007

Online Research Once Again Proven To Be An Integral Part Of The In Store Shopping Experience

Here is a news clip that I pulled from Accenture Research that is yet another data point confirming what we all know to be true about the web's influence on in store sales. Thanks Ted (Westerheide) for catching this and pointing this study out to me.

"In an recent Accenture survey (4/4/07) of more than 600 U.S. consumers has found that the majority of consumers use the Internet as part of the shopping process even if they go to stores to purchase or pick up items. The data suggest that retailers and consumer goods companies need to focus on customer service and information available both from call centers and online or risk losing customers researching potential purchases.

While two-thirds (67 percent) of survey respondents said they prefer to make purchases in physical stores respondents also said they research product features online (69 percent), compare prices online before shopping in a physical store (68 percent) or use the Internet to locate items online before going to a store to purchase (58 percent). Only 13 percent of respondents said the Internet has not improved their in-store shopping experience.

“Instead of replacing bricks and mortar stores, the Internet is an extension of consumers’ in-store shopping experience providing a resource to research product and price,” said Jeff Smith, global managing director of Accenture’s Retail practice. “Retailers and manufacturers must understand this consumer behavior trend in order to reach shoppers, educate them, serve them and earn their loyalty.”

Awareness and loyalty

When asked to identify the most powerful influencers of their purchase decisions, the greatest number of respondents – 60 percent – said word-of-mouth, followed by advertising (47 percent) and online information (43 percent) are the most influential. The top three ways consumers said they learn about new products are television (64 percent), word of mouth (47 percent) and print ads (37 percent).

Half (50 percent) of consumers surveyed said they value special promotions to retain their business while 37 percent said they look for improved customer service. Promotions for frequent customers appear to be more effective for women than for men with 54 percent of female respondents saying they value these promotions compared to 47 percent of males surveyed.

Timing seems to be a bigger influence than promotions for new product purchases of both health and beauty items. For example, 33 percent of respondents said they bought a new health or beauty product because they needed it at the time compared with only 22 percent who said they bought such a product because they had a coupon or found the product on sale.

“It’s critical to understand customers’ wants and needs before, during and after the actual purchase,” said Keith Barringer, global managing director of Accenture’s Consumer Goods & Services practice. “Increasing insight into the customer – and acting on it – can help manufacturers successfully time new product launches and help retailers know when to offer promotions to increase revenue and customer loyalty.”

The majority (55 percent) of respondents said new products are introduced before they realize a need for them while nearly half (47 percent) said that new products are introduced that they don’t feel they need. Almost one-third (30 percent) of respondents said they could think of new products they need that have not been developed yet.

“This research shows there are significant opportunities for manufacturers to improve their innovation and product development processes,” added Barringer.

Service and selection

The survey findings indicate that consumers want better service and product selection both online and in the store. More than two-thirds (67 percent) of respondents reported that, when shopping in physical stores, they often find too few registers are open and more than half (54 percent) say there are not enough sales people available. Many respondents said they will go elsewhere if they don’t find the appropriate selection at a certain store; this is particularly true for items such as footwear (81 percent); music, movies and books (78 percent); and jeans (76 percent).

“Consumers are telling us that there is a need for more efficient customer service departments,” said Smith. “The phone, and increasingly a company’s web site, are the first points of entry. If the on-hold time is too long, if the customer is passed around to different departments or if online navigation is confusing the sale can easily be lost. Customer service can be a powerful – and profitable – differentiator for retailers that know what their customers want and how to deliver it.”

Only 50 percent of respondents report getting help always or most of the time for electronics stores and household furnishings with 47 percent saying the same for specialty stores. According to 43 percent of respondents, mass retailers provide help some of the time but 29 percent report the mass stores rarely or never have help available when needed.

The survey also found:
  • Location is not shoppers’ main concern. Consumers say price and product selection matter more than store location when shopping. The key criteria respondents cited for deciding where to shop are price (85 percent), and product selection (69 percent) followed by store proximity (57 percent).
  • Gender differences. More men than women (51 percent vs. 39 percent) report the Internet has improved the in-store shopping experience by allowing them to order items online for in-store pick-up. More men than women (17 percent vs. 9 percent) purchase in-store to get better prices while more women than men (16 percent vs. 8 percent) purchase in-store to avoid shipping charges."
To read the full article, go to:

Tuesday, May 08, 2007

It's Rare That Two Independant Research Companies Agree - Espcially Forrester & Jupiter

So I am still really amp'd up that another credible research source (Forrester) has also concluded independantly that "almost $400 billion of store sales — or 16% of total retail sales — are directly influenced by the Web as consumers research products online and purchase them offline. This will grow at a 17% CAGR over the next five years, resulting in more than $1 trillion of store sales by 2012." This research is exactly inline with what Jupiter released a few months ago. A few other interesting sound bites from this new Forrester report are:
  • Slightly more than half of online consumers have researched a product online and then purchased it offline in a traditional brick-and mortar location.
  • 45% of W2S shoppers say that they buy additional products once in the store, spending on average $154 in incremental purchases.
  • Offline sales not influenced by the web will decrease by 24%
  • Cross-channel sales (web 2 store) will grow to 38% of total retail sales over the next five years
Source: Forrester report titled, "The Web’s Impact On In-Store Sales: US Cross-Channel Sales Forecast, 2006 To 2012"

Monday, May 07, 2007

Forrester Reports On The Web’s Impact on In-Store Sales

In a fresh report posted today by Forrester titled, "The Web’s Impact On In-Store Sales: US Cross-Channel Sales Forecast, 2006 To 2012", it reports on the web's impact on in-store sales:

  • Estimates that $400B of store sales (16% of total retail sales) directly influenced by web
  • Will grow at 17% CAGR over the next five years; $1T of store sales by 2012
  • eCommerce sales equal 11% of total retail
  • Cross-channel sales equal 38% of total retail